The OIG 2014 Work Plan – Thoughts and Observations on Nursing Homes

On Jan. 31, the Office of Inspector General (OIG) released its 2014 Work Plan, in which it announces and discusses the projects it intends to focus on in the coming year. I plan to do a number of posts on the Work Plan, but I want to start with an industry that receives surprisingly little attention in the document – nursing homes.

OIG only announced five areas of focus with respect to nursing homes. The first concerns Medicare Part A billing. OIG noted that it previously observed skilled nursing facilities (SNFs) increasingly billing for higher levels of therapy even though beneficiary characteristics remained the same; it also explained that SNFs had a high (25 percent) billing error rate. There are two main takeaways from this. Nursing homes need to really examine their billing practices and procedures and ask themselves if there are any systems or protocols that might improve accuracy. And, it’s my experience that a high care level claim isn’t so much unnecessary on its face, it’s that the provider doesn’t keep or record enough information to prove that it was. Therefore, insofar as high care level services are being billed, SNFs might think about expanding their recordkeeping practices to ensure that enough documentation is present to justify the claim.

OIG’s second area of focus involves questionable billing practices for nursing homes submitting Medicare Part B claims. The agency specifically references stays during which benefits are exhausted or the three-day prior inpatient requirement is not met. Obviously, that doesn’t give us much to go on.

The third area of focus is a little more specific, though probably inapplicable to most providers. OIG indicates that it intends to focus on state agency verification of deficiency corrections. Federal regulation requires nursing homes cited for deficiencies to provide state regulators with a plan of correction to explain how they will correct the problems. The Centers for Medicare & Medicaid Services (CMS) State Operations Manual further requires states to verify that the cited deficiencies have been corrected. In the Working Plan, OIG cautioned that “one State survey agency did not always verify that nursing homes corrected deficiencies.” It’s unclear which state that was, or whether it was only the one state. Nonetheless, I expect most states will crack down on post-correction verification. This has two related ramifications. When devising a plan of correction, it is essential that nursing homes be realistic. Chances are, state surveyors will put nursing homes’ feet to the fire to make sure they take the steps they say they will. Also, nursing homes should make sure they follow through and do what they say they will on the timetable promised.

OIG’s fourth targeted area is interesting. It wants to evaluate the results of the CMS National Background Check Program (NBCP). This program essentially gives states money at a 3:1 federal-state ratio (not to exceed $3 million) to help providers run comprehensive background checks on their employees. States that participate in this program include Alaska, California, Connecticut, Delaware, Florida, Illinois, Kentucky, Missouri, New Mexico, North Carolina, Oklahoma, Rhode Island, and Utah as does the District of Columbia. It’s interesting that the list of states is so small. CMS has handed out tens of millions of dollars over the past several years, and most states – including Colorado – already require background checks for employees of long-term care (LTC) facilities. The NBCP requires a more comprehensive background check system, but that seems like a lot of money to leave on the table for something states will do most of anyway. In any event, I wouldn’t be surprised to see Colorado and a bunch of other states opt in to the NBCP or CMS make it mandatory.

The fifth area of focus involves Medicare patient hospital admissions as a result of manageable or preventable conditions at nursing facilities. This was the subject of a 2013 OIG Report. It’s hard to come up with a good recommendation for this one. On the one hand, it’s probably a good thing when an LTC facility and a doctor err on the side of caution and hospitalize an ill or injured resident – to do otherwise would risk a treatable condition deteriorating. On the other hand, though, if CMS or OIG is going to start tracking hospitalizations on a facility-by-facility basis and scrutinizing those facilities that have too high of a rate, erring on the side of caution may have real regulatory consequences. I suppose the best thing to say is this is an issue that needs to be closely monitored going forward.

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